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Letter addressed to Kestutis Sadauskas, Director and Hugo Maria Schally, Head of Unit at DG Environment from Sylvain Lhôte, Director General of the Confederation of European Paper Industries (CEPI)

I am writing to inform you that CEPI will postpone the submission of the PEFCR until further activities have been finalised to achieve the operational and workable category rule the pilotshould deliver. I believe this decision deserves some explanations and I feel useful to outline our reasons for postponing the submission and the steps CEPI will take to conclude the pilot.CEPI has always shared the need to establish a customer and consumer friendly manner of communicating about the environmental performance for paper products. Indeed we recognise the initial aim of the PEF was to have a harmonised method for simplifying environmental footprints for products and organisations. It is important to include the views ofall stakeholders such as those of material and product producers as well as customers to secure a manageable workload that ensures the effectiveness of future PEFs.

For nearly seven years, CEPI has been actively assisting DG Environment in piloting product environmental footprints.

In 2011, DG Environment requested CEPI’s assistance in putting together from scratch a PEFCR project. CEPI was able to prepare at very short notice the first-ever PEFCR for paper by promptly mobilising a large number of industry experts and by implementing innovative working methods such as crowdsourcing. The project concluded that the PEFCR was too academic to be applied in daily business and would require simplification. Two years later, CEPI was invited to join the 2013 – 2016 Environmental Footprint (EF) pilot phase with the understanding that, building on the previous pilot, the new pilot would be rather limited in time and would deliver a simpler and workable tool.

Unfortunately this has not been the case. The project’s objectives turned out to be much more ambitious than initially signalled and required significantly more expert time, money and resources than was communicated to pilots. Managed by the JRC, the Intermediate Paper Pilot was due to be completed by 2016 but has been repeatedly extended. It is now expected to carry on until the first quarter of 2018 and may be further delayed. This has caused a massive burden for the organisations involved as companies could not plan over time the allocation of experts’ resources to the project. Throughout the process, our industry experts have continuously demonstrated their agility to adapt and commitment in contributing to the project.

Additional burden has been caused by what seems to be a lack of understanding by the JRC of materiality and business needs, including confidentiality. Likewise, the JRC seems to lack the ability to take into account results from the studies (especially testing the Communication Vehicles) which goes against the stated objectives of the project.

EF pilot phase had indeed three stated main objectives: 1. test the process for developing product- and sector-specific rules; 2. test different approaches to verification; 3. test communication vehicles for communicating life cycle environmental performance to business partners, consumers and other stakeholders. Instead of advancing an operational and pragmatic modelling rule in simulacra that would help produce a simplified and robust reflection of reality, the project has been pushed in an overly complex and detailed direction. When testing the communication vehicles, it was independently and unanimously found across different downstream sectors, various sizes of business and geographic locations, that all customers rejected the footprint results due to the complexity and redundancy (beyond what can be considered material) of data.

As it now stands, performing a footprint calculation with the PEFCR remains a challenge and requires either the deep expertise of in-house LCA teams or the use of external consultants at a significant cost. This will make the tool far too costly and unusable for our industry value chain mostly composed of SMEs. The maxim, set by Commissioner Vella at the EF mid-term conference, “what is not good for SMEs is not good for anyone” has obviously been lost by the JRC when it comes to the process, the complexity and the cost of the task. Worryingly, the functioning of the Intermediate Paper PEFCR is also still today unknown. In addition to their human resources, companies involved in the pilot have invested €15,000.00 (x production site x product) to produce supporting studies in 2016. A “final” PEFCR then went through a formal consultation. But somewhat inconsistently, the final PEFCR wasn’t at that time final and was then significantly amended by JRC referring to the guidance that was only made available after the “final” PEFCR was presented. The JRC is still in process of amending the PEFCR.

Industry experts and companies involved in the project have lost confidence that a meaningful and workable tool can be delivered under the current approach and process. We do regret this situation but still believe it can be resolved.

Firstly, a majority of the companies involved in the Intermediate Paper Pilot have made a commitment to review and revise the current PEFCR into an operational and pragmatic category rule.

Secondly, CEPI is willing to set aside a budget to develop this into free intermediate paper software and stands ready to extend it for final paper products. We indeed appreciate the offer by DG Environment (email 11/07/2017) to share the software code being developed for t-shirts, beer, leather and olive oil pilots. We strongly believe this could radically reduce the cost of PEF calculations in the paper value chain and make it readily available to SMEs. Both activities would fit neatly within the transition phase the Commission has announced for April 2018.

Both activities would fit neatly within the transition phase the Commission has announced for April 2018.

CEPI will therefore postpone the submission of the PEFCR until the following activities have been finalised, by the end of 2018:

1. CEPI would take over the coordination and management of the project.
2. Review and revise internally the current PEFCR to an operational and pragmatic
category rule.
3. The Technical Secretariat would be restarted to formally revise the PEFCR.

ln addition, CEPI would expect DG Environment to share the software code being developed for t-shirts, beer, leather and olive oil pilots in order that CEPI can develop it into free intermediate paper software, ready to extend to a tool for final paper products.

The PEFCR and calculation tool would be actively disseminated and made available for free by CEPI to radically reduce the cost of PEF calculations in the paper value chain. We trust this approach will meet the interest of the paper value chain, its consumers and stakeholders as well as DG Environment.

I believe we can all agree that we share a common aim in producing a successful European tool that will be actually used by all businesses. I remain available to further discuss the matter at your convenience.

The Confederation of European Paper Industries (CEPI) informed the European Commission on 13 November of its intention to take over the PEFCR (Product Environmental Footprint Category Rules) prepared under a larger EU pilot on environmental footprints.

“The PEFCR project promised to deliver a clear, simplified and workable method for environmental footprinting that our value chain could effectively use and rely upon. After more than four year’s work, the European Commission body in charge of the project is far from this objective. CEPI will now take the necessary measures to conclude the project and design a tool that is meaningful for business and workable for SMEs,” says Sylvain Lhôte, Director General at CEPI.

Initiated in 2013, the Intermediate Paper Pilot was meant to deliver a methodology for environmental footprinting of intermediate paper in a clear and workable format for all users. It was considered, at that time, that the workability of future PEF rules was imperative for the paper value chain, particularly SMEs. Led by the European Commission’s Joint Research Centre, however, the project has since been turned into an overly academic tool and the process continuously delayed.

The industry recognises the value of establishing a reference tool for communicating the environmental performance of paper products to customers and consumers. The industry has therefore decided to take back the lead from the European Commission and revise the PEFCR. In order to do so, CEPI has outlined a number of key steps in a letter sent to the Commission’s environment department here. The process would lead to developing free software for calculating the environmental footprint of intermediate paper, which could be extended by the printing and paper converting associations to a tool for final paper products. CEPI believes these steps are achievable over the 2018 – 2019 period.

Note to editor:

CEPI is the pan-European association representing the forest fibre and paper industry. Through its 18 national associations CEPI gathers 495 companies operating more than 900 pulp and paper mills across Europe producing paper, pulp, cardboard, tissue and other bio-based products. CEPI represents 22% of world production, €81 billion of annual turnover to the European economy and directly employs over 175,000 people.

For more information, please contact Jori Ringman, Deputy Director General at j.ringman@cepi.org or by phone at (+32) 478 25 50 70

Following today’s inter-institutional political agreement on the Emissions Trading System (ETS) the Confederation of European Paper Industries (CEPI) is broadly encouraged by improvements in the regulation for the 2021-2030 period.

“The conclusion of the ETS negotiations now restores the regulatory predictability needed for advancing industrial transformation. Investments in low-carbon technologies are core to what we stand for as an industry. A more stable regime and tools such as the ETS Innovation Fund will be crucial in accelerating the industry's transition towards a low-carbon circular bioeconomy” says Sylvain Lhôte, Director General of CEPI.

The final compromise text improves significantly the scheme with a more robust stability in carbon leakage provisions and firmer predictability in reviewing the benchmark values. The Innovation Fund will also act as a crucial mechanism in advancing the breakthrough technologies that will spur the industry’s low-carbon transition.

Nonetheless, several aspects of the text are lacking and these would need to be resolved. For instance, the Market Stability Reserve (MSR) was significantly amended without any prior assessment of its impact on “industrial competitiveness and the risk of carbon leakage”, even though this was an explicit requirement when amending the MSR decision. Likewise, no solution was found to effectively ensure compensation for indirect costs for exposed energy intensive installations. Finally, while the risk of a shortfall in free credits has been mitigated it has not been structurally eradicated thereby causing unnecessary regulatory risks. The impact of all of the above-mentioned aspects will become more evident by 2021, when all implementing legislation will be finalised. It is therefore imperative to swiftly finalise the full regulatory landscape by adopting all the implementing acts well ahead of 2021.

Note to editor:

Ensuring that the ETS also functions as a pro-investment tool is a core component of the European paper industries ‘2050 Investment Roadmap’. Check out our ‘Alignment matrix’ here to see how the ETS can provide a platform for catalysing and enabling industry transformation in Europe.

For more information, please contact Nicola Rega, Climate Change and Energy Director at n.rega@cepi.org or by phone at (+32) 485 40 34 12

The Environment (ENVI) committee has understood the importance of better aligning the text with Circular Economy principles, energy efficiency standards and sustainable forest management practices. It nonetheless seriously jeopardises Europe’s bioeconomy by encouraging the mass conversion to biomass by low-efficiency coal power plants.

“Despite significant technical improvements the ENVI committee vote misses the big picture and may cause an unsustainable dash for biomass” says Sylvain Lhôte, Director General of the Confederation of European Paper Industries (CEPI). “The European bioeconomy deserves much better than turning wood into megawatts. We remain however confident that the text can be rebalanced at plenary”.

CEPI strongly holds the view that forest biomass should be both sustainably sourced and efficiently used in order to effectively contribute to Europe´s renewable energy and climate change targets.

A broad range of topics affect the European pulp and paper industry, for example energy, forestry, recycling, food contact, and trade. These issues are subject to European policies, which can directly impact the industry’s competitiveness and sustainability. Many of these issues are interconnected, and this is reflected in the integrated approach that CEPI takes in addressing them.

This section provides you with information on all of the key topics currently impacting our industry. Click on the menu above or in the list below for the latest information for each topic.

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